Correlation Between Group 6 and AMP
Can any of the company-specific risk be diversified away by investing in both Group 6 and AMP at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Group 6 and AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and AMP, you can compare the effects of market volatilities on Group 6 and AMP and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Group 6 with a short position of AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and AMP.
Diversification Opportunities for Group 6 and AMP
Good diversification
The 3 months correlation between Group and AMP is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP and Group 6 is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Group 6 Metals are associated (or correlated) with AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Group 6 i.e., Group 6 and AMP go up and down completely randomly.
Pair Corralation between Group 6 and AMP
If you would invest 145.00 in AMP on September 4, 2024 and sell it today you would earn a total of 13.00 from holding AMP or generate 8.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. AMP
Performance |
| Timeline |
| Group 6 Metals |
| AMP |
Group 6 and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and AMP
The main advantage of trading using opposite Group 6 and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 position performs unexpectedly, AMP can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AMP will offset losses from the drop in AMP's long position.| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Bluescope Steel | Group 6 vs. Sandfire Resources NL |
| AMP vs. Macquarie Technology Group | AMP vs. Qbe Insurance Group | AMP vs. Treasury Wine Estates | AMP vs. Land Homes Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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